What Happens with Federal Pay Data Reporting May Prompt State Action

The preparation of the 2019 EEO-1 Report is over for the employers who have acted diligently to meet the September 30 deadline to submit their Component 2 EEO-1 report filings with the U.S. Equal Employment Opportunity Commission (EEOC) for the 2017 and 2018 tax years.

Whether Component 2 data will be reported for future years has yet to be determined. For its part, the EEOC stated in a Notice of Information Collection that it has informed the Office of Management and Budget that it is not seeking to renew the Component 2 pay data requirement for future tax years. The agency cited employer costs as the reason it was not seeking to renew the Component 2 pay data reporting requirement. The agency estimates the cost to employers of submitting both Components 1 and 2 would be $614,391,388 in 2017 and $622,015,798 in 2018.

The notice states: “Under the PRA, the EEOC must balance the utility of the data to its enforcement programs against the burden the data collection as structured imposes on the employers who must submit it. The Commission now concludes that it should consider information from the ongoing Component 2 data collection before deciding whether to submit a pay data collection to OMB. At this point in time, the unproven utility to its enforcement program of the pay data as defined in the 2016 Component 2 is far outweighed by the burden imposed on employers that must comply with the reporting obligation.”

If the OMB approves this request, it would result in the elimination of Component 2 altogether.

The EEOC intends to continue its collection of Component 1 data, noting that this data has been critical in the EEOC’s enforcement of employment discrimination laws.

However, the EEOC may not have the final say on whether Component 2 pay data continues to be reported in future tax years. A court case involving the National Women’s Law Center and the Office of Management and Budget is being appealed a second time regarding the pay data reporting requirements. The OMB lost the decision in April to stay the pay data reporting, but is currently attempting to stay it again. The DC Circuit Court of Appeals could very well order the EEOC to collect the third year of data, which is for 2019. This would result in Component 2 pay data reporting being submitted in March of 2020. You can learn more about the history of the case by clicking here.

With the future of pay data reporting to the federal government uncertain, at least one state, New Jersey, has said it wants employers operating in the state to provide pay data reporting as a component of the state’s Diane B. Allen Equal Pay Act. The EPA requires employers with public contracts to submit pay data reports to the state Department of Labor and Workforce Development and is being enforced.

In California, SB 171 passed the Senate, but did not pass the Assembly. The bill would have required private employers in California with 100 or more employees to submit an “Employer Information Report” containing wages and hours-worked data to the state Department of Fair Employment and Housing.

The question is whether more states in their next legislative sessions take up the call to require pay data reporting on the state level as pressure grows for businesses to be more transparent in providing pay data as the push for more effective equal pay laws continues to grow. What happens with pay data reporting at the federal level may play a role in what happens.

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What Happens with Federal Pay Data Reporting May Prompt State Action
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What Happens with Federal Pay Data Reporting May Prompt State Action
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